Overall, homeowner’s insurance is fairly comprehensive. It financially protects you from the burden associated with a variety of potential events. This ensures that you can move forward with repairs or replace stolen or damaged belongings. However, homeowners insurance doesn’t cover everything. In fact, there are some gaps that many don’t expect. These gaps can lead to a rude awakening if certain kinds of events occur. If you are wondering what is not covered by homeowners insurance. Here are five things that usually aren’t.
If your budget is tight and you are struggling to keep up with your monthly obligations, finding a way to lower your auto loan payment might seem like a smart move. Usually, car payments are one of the largest expenses in a household for those with an auto loan. The average new vehicle loan payment comes in at $554, while the average for used cars sits at $391. If refinancing lets you lower that amount, going through with it may be enticing. But refinancing a car isn’t always the best way to go. In fact, it can get you into some financial trouble if you aren’t careful. If you are considering an auto loan refinance, here’s why refinancing is a bad idea.
Many adults with living parents will one day face a complicated situation. They may find themselves saying, “My parents want to move in with me for financial reasons,” and trying to figure out whether it’s a smart move. After all, bringing your parents under your roof could be tricky.
When you’re thinking about buying a house, you don’t want to rely on a bank to tell you how much you can afford. Just because you qualify for a $100,000, $200,000, or $300,000+ mortgage doesn’t mean that you can actually shoulder that burden. There may be aspects of your budget the lender isn’t taking into consideration, for one. For another, if your monthly payment is too much of a burden, you’ll make yourself “house poor,” which isn’t a great situation. Luckily, it is possible to figure out how much house you can really afford. Here’s a house affordability calculator that can help.
If you’ve ever wondered what “free after rebate” means you’re definitely not alone.
Rebates are promotions used by retailers or manufacturers that give costumers a discount after they purchase a product. Sounds backwards right?
According to Clinician Today, in 2017, there were more than 1,000 EHR vendors offering systems to medical practices. With so many options, it can be confusing and exhausting trying to find the one that’s right for you.
You may not have even started your search for EHR companies and already feel overwhelmed.
The coronavirus pandemic shook the financial lives of many. The stock markets took major tumbles, and unemployment claims reached the 40 million mark. Which is creating a lot of uncertainty. Financial planning during tumultuous times is always challenging. Adding to it, the COVID-19 situation and the instability of the current economy. Trying to figure out what to do for your personal financial health is even harder. Luckily, financial advisors can help you navigate these seemingly treacherous waters. However, you do need to make sure you ask the right questions, ensuring you get the information you need. If you are scheduling a meeting, here are five questions you should ask your financial advisor now.
What would you do if you never had to visit the bank again?
You depend on banks for your car loans, house loans, student loans, and so much more. They are in control of how you access your money and set the interest rates on any debt that you have.
Shopping – a modern pastime activity of pleasure and benefit. Are you trying to figure out how to save money when shopping?
Well, right off the bat – we won’t be able to make your $1000 purchase get a 90% discount.
Whenever you buy a home, regardless of its age, it’s highly likely that you’ll be given a chance to purchase a home warranty. Often, these services are marketed as safety nets. Offering you protection against potentially large expenses, like repairs or appliance replacements. In many ways, it sounds like the perfect way to get some peace of mind. Especially after making such a big investment by buying a house. But the big question is. Are home warranties actually worth it in the end? If you’re considering a home warranty. Here’s what you need to know.
The Appeal of Home Warranties
New homeowners often can fathom shouldering a major financial burden. After all, they’ve likely put down quite a bit of money to acquire the property. For most this means diving deep into their savings to make the purchase happen. As a result, the idea of having to pay for a new appliance or critical home system repair now is incredibly daunting. That’s why home warranties are appealing.
Home warranties are advertised almost like insurance. It protects homeowners from unexpected costs like those mentioned above. It’s essentially a service contract. One that allows home buyers to pay an amount upfront in exchange for financial assistance if a qualifying event occurs within a specific period. That concept provides a sense of security, making it enticing for many.
What Home Warranties Do and Don’t Cover
Every home warranty is different. However, the service contracts do typically have quite a bit in common. In most cases, they are limited to items and systems that were in good working condition at the point the homeowner bought the property.
Additionally, home warranties focus on failures that result from standard wear-and-tear, not events like thefts, fires, and floods, which fall into the hands of homeowners’ insurance companies. Further, if a homeowner neglects system or item maintenance, causing it to fail or to require repairs, that usually isn’t covered.
Which items and systems are included will be spelled out in the service agreement. Similarly, the approved failure circumstances will also be outlined.
The Cost of Home Warranties
The price of a home warranty can vary depending on numerous factors. The property’s location, existing items, and current systems all play a role in the cost. Similarly, the home’s age will impact the price tag. However, it isn’t uncommon for the price to come in between $350 and $600 a year, not including the service call fees, which usually run about $75 to $125 per visit for each contractor specialty involved.
In comparison to replacement expenses and typical repair costs, that can seem like a bargain. For example, central air conditioning replacements can run $5,000 or more, depending on the specifics of the system, and just one appliance can run from $350 to $8,000+.
Home Warranty Pros and Cons
A home warranty does provide some protection against the unexpected; that’s really the biggest benefit it provides. Plus, it can help reduce the cost of certain repairs, as the warranty itself may come with a significantly smaller price tag than shouldering the financial burden without one.
Additionally, if you are selling a property, throwing a home warranty into the deal could make your property a more attractive buy. It gives the homebuyer a degree of protection, which might make them feel more secure about moving forward.
However, home warranties are limited. If a lack of proper maintenance is a factor, the company won’t cover anything, and you still have to pay the service call fee. The concept of “proper” maintenance is a bit ambiguous, so there’s no guarantee that the home warranty company’s definition will match yours, leading to arguments. This is especially true if the previous owner was negligent, and the new owner can’t undo the damage on their own. That could be enough for a company to deny a warranty claim.
Claim and Dollar Maximums
Home warranties also come with claim and dollar maximums, along with exclusions. While they aren’t incredibly expensive, many are highly limited, impacting their value.
Finally, aside from providing peace of mind, you don’t get anything from a home warranty if you have no claims. If a person put that cash in a high-yield savings account instead, they may be able to afford any repairs or replacements on their own once the need arises.
Is a Home Warranty Worth It?
Ultimately, a home warranty does potentially have value, especially if a home seller wants to throw one in as part of your purchase. However, if you are considering adding one yourself, reading the fine print is a must. You need to see if the requirements and restrictions provide you with value.
It’s also wise to research the warranty provider using trusted resources. Not all companies are as reputable as others, so finding one that has a solid reputation is essential.
Otherwise, there’s always an alternative. If you build up a healthy emergency fund, you may be able to cover any unexpected costs yourself, eliminating the need for a warranty. For many, that approach works, so make sure to keep it on the table while you examine your options.
Do you think home warranties are worthwhile investments? Why or why not? Share your thoughts in the comments below.